Minister: Pellet producers must prioritize local demand as prices rise 38.6% in Latvia

Climate and Energy Minister Jānis Vitenbergs on Wednesday met with representatives of the Latvian Wood Industry Federation and the Latvian Renewable Energy Federation to discuss the wood pellet market. In recent weeks, prices have risen again and supply difficulties have been observed.

The minister called the situation “absurd,” noting that Latvia is among the top five pellet producers in Europe yet faces product shortages in stores and sudden price jumps every few months. Vitenbergs emphasized that producers must prioritize local demand over exports.

During the meeting, participants discussed the causes of the situation, forecasts for summer, and practical steps. Producers cited a shortage of high-quality raw materials (wood chips) as a limiting factor. Therefore, the Ministry of Climate and Energy (KEM) plans to ask AS “Latvijas valsts meži” to ensure contract supplies to producers who join a voluntary initiative focused on responsible operations in the Latvian market.

KEM will also ask the Consumer Rights Protection Centre (PTAC) to monitor retail pellet sales, including transactions on the platform “ss.com.” Additionally, the ministry will request the Competition Council to monitor for unfair commercial practices, as the minister believes speculators are exploiting the situation by creating artificial demand.

Vitenbergs stressed that energy security is a priority, and if voluntary measures fail, the state may develop emergency regulations. KEM will continue to monitor the fuel market.

Earlier, Didzis Palejs, Chairman of the Board of the Latvian Biomass Association “LATbio,” reported that the current price at producers is €300–310 per ton including VAT. Last summer, the price was around €220, an increase of 38.6%. Palejs explained that the rise is partly due to raw material costs and high demand, noting that many consumers are already responsibly preparing for winter.